by Dean Popplewell
Europe is the land of opportunity so says the deep in the profit long EUR investor. It was only a couple of weeks ago that the psychological 1.35 level was a mere mirage. It is now becoming just another small hurdle to take out. Falling Euro periphery yields and Fridays LTRO schedule repayment results are giving the single currency some new found momentum that wants to push it towards the new psychological point of 1.37. Investors are now asking and why not.
Week in FX Americas Loonie Takes Flight In Wrong Direction
Another benign inflation reading from Canada has the CAD ending the week extending its losses above parity outright. The countrys core-inflation rose by an annualized pace or +1.1% on Friday, well below Governor Carney and the Bank of Canadas medium term inflation target of +2%. So far the week the loonies plight has fallen -1.47% against its largest trading partner, south of the 49th parallel.
So far it seems that hedge funds have been well positioned to profit from the yens move, while real-money investors have mostly missed out on this outright 15% decline over the last three months and a 25% fall against the EUR since the summer. The real-investor seems to have been too hung up on the EUR and its periphery concerns. The fact that the yen crosses remain under pressure, despite the BoJ falling somewhat short of expectations earlier this week, is strong proof that the Central Bank really does like yen at 100.